The Federal Government agreed today on a comprehensive support package for Uniper SE. The company is one of Europe’s largest gas companies, and Germany’s largest importer of Russian gas. The company has found itself in acute difficulties due to Russia’s failure to deliver contractually agreed gas.
Uniper plays a central role in Germany’s supply of gas and electricity. The stabilisation package adopted today by the Federal Government therefore makes a key contribution towards safeguarding Germany’s energy supply.
The Federal Government assumes that the costs will continue to rise for all gas customers from the autumn. It has therefore agreed on additional support.
“We will do all it takes, today and for as long as is needed,” said Federal Chancellor Olaf Scholz at a press conference in the Federal Chancellery on Friday afternoon. “We will make sure that no-one is unable to cope with the current situation.”
Vice Chancellor and Economic Affairs and Climate Minister Robert Habeck added: “We will not allow a systemically relevant company like Uniper to fail, thus jeopardising Germany’s energy security. The shortage of energy that has been artificially created by Russia is not a normal fluctuation that the market can digest. In order to safeguard the security of our energy supply, we therefore intend to use the redistribution mechanism of the Energy Security of Supply Act, and we will be discussing this with parliament. The relief we wish to introduce is good, targeted and rightly focused primarily on those who have little money and are therefore particularly affected by the high prices. We are also addressing support for companies under pressure.”
“We as the Federal Government have a responsibility to safeguard the supply of gas in Germany,” added Christian Lindner in justification of the step. “Uniper is a company which is of central significance; many municipal utilities and industrial companies depend on the gas supplied by Uniper. Today’s agreement within the Federal Government to support Uniper safeguards the supply of gas to households and companies, even in these challenging times of the Russian war of aggression. It is important for me that the existing shareholders of Uniper are also making their contribution, and that the Federation is not bearing all the commercial risks of future developments on its own. We have made sure of this in tough negotiations. We need to use the tax-payers’ money responsibly.”
The stabilisation package for Uniper amounts to up to €15 billion and covers the following points:
• An increase in the existing KfW loan of €2 billion to €9 billion;
• Up to €8 billion is provided to the company in the form of equity. The Federation is acquiring 30% of the shares in Uniper for around €270 million, at a nominal value of €1.70 per share via a capital increase. A further amount of up to €7.7 billion will be made available in the form of an obligatory convertible bond;
• The Federation will be represented on the supervisory board;
• Also, Uniper will be subject to restrictions on remuneration for the board and to a ban on dividends.
Fortum, the main shareholder, commits to leaving a shareholders’ loan of €4.0 billion in the company, and has the possibility to exchange this for parts of the obligatory convertible bond at a later point in time. Also, Fortum continues to provide the company with a guarantee line of €4.0 billion.
The equity capital instruments of the stabilisation package are subject to approval by the general shareholders’ meeting of Uniper. Also, this support package is still subject to authorisation by the European Commission in accordance with state aid rules. The Federal Government is already engaged in intensive talks with the Commission about this.
The stabilisation is based on the understanding that the importers of Russian gas can pass on a large proportion of the costs they incur to purchase gas to make up for missing Russian gas imports. In other words, the statutory possibilities of a redistribution mechanism under section 26 of the Energy Security of Supply Act are to be used; at the latest by 1 October 2022: the Federal Government will examine the introduction of the redistribution from 1 September 2022.
This will impose further burdens on the gas customers. The Federal Government has therefore agreed that there should be further relief for the general public.
• Boosting housing benefit, with the reform taking effect on 1 January 2023.
• Introduction of citizens’ minimum income on 1 January 2023.
• Review of rules to prevent the termination of contracts so that tenants who cannot afford their rent and energy customers who cannot afford their energy do not have their contracts cancelled.
• Protective shield for companies which encounter difficulties due to the high energy prices (credit lines from the KfW, extension of the guarantee programmes, extension to the grant for particularly energy-intensive companies, state equity assistance for systemically relevant companies).
Also, the concerted action is already taking place together with representatives of the trade unions and the business associations on additional ways to mitigate the losses of purchasing power for individuals without further fuelling inflation.